Just like common Joes and Jills, politicians, economists, and bigwigs in the upper echelons of society are subject to whims. This was only accentuated on Wednesday, as the world’s most powerful economic body revealed that it would be taking a step in a new direction, pushing gold and stocks much higher. Bitcoin remained unchanged, but many believe that this decision could be a positive catalyst for the crypto asset in the years to come.<\/p>\n
During early-October, the U.S. stock market, especially companies listed on the tech-centric Nasdaq, were in for a dramatic shock. In a brief, seemingly innocuous\u00a0remark,\u00a0U.S. Federal Reserve (Fed) chairman<\/a>, Jerome Powell, claimed that the American central bank wasn’t close to discerning that a neutral rate of growth was needed.<\/p>\n As Powell’s quip echoed off the walls of the Internet’s echo chambers, Wall Street went into a semi-panic, as a number of tocks en-masse quickly moved off all-time highs to fresh multi-month lows. By December, markets looked dismal, as the S&P 500, Nasdaq, and other pertinent indexes across the globe had officially entered bear market territory. Even assets other than publicly-tradable shares were in the dumps, as the Homebuilders Index and commodities felt pain too<\/a>. This further sell-off was likely catalyzed by Powell’s comment that the Fed’s balance sheet, which was pruning bond holdings rapidly, was\u00a0on “autopilot.”<\/p>\n But since Christmas, which was preceded and followed by a\u00a0number of what can only be described as chaotic trading sessions, incumbent president Donald Trump and Powell have been duking it out. Trump has overtly attacked the Fed for its seeming ease of hiking its target interest rate. But Powell and his economists\/advisors maintained that their intent was to increase policy rates in 2019.<\/p>\n Yet, according to a recent report from CNBC<\/a><\/em>, Powell has effectively gone back on his word, noting that the central financial body voted unanimously to put rate hikes on the backburner… for now. In a statement from the fiscal powerhouse, it was explained that “in light of global economic and financial developments and muted inflation pressures,” the Fed would be “patient” in determining what moves it would take with its targeted rate.<\/p>\n Long story short, Powell and his\u00a0cronies have decided, (purportedly not in response to Trump’s bashing tweets), that policy rates won’t be increased due to an underlying positive shift in the macroeconomy.<\/p>\n When mainstream media outlets spread the word on this matter, the market jumped, posting gains that accentuated that investors are regaining confidence in this market. As of the end of Wednesday’s trading session, the S&P 500 is up 1.55%, while the Nasdaq Composite is up a more impressive 2.20%. Interestingly, gold also saw a nice bump, with the precious metal moving to $1,320\/oz spot, compared to the $1,313 price seen on Tuesday.<\/p>\n What does this all mean for Bitcoin and the broader cryptocurrency ecosystem?<\/p>\n Apparently not much. That’s according to Alex Kr\u00fcger anyway, who recently took to Twitter to joke that Bitcoin has no idea what the Fed is, nor the entity’s enamorment with interest rates and playing with the market like a string instrument.<\/p>\n Market reactions to the Fed:<\/p>\n Gold: I'm lovin' it<\/p>\n Bitcoin: what is the Fed? interest what? pic.twitter.com\/MAlMTnCmqm<\/a><\/p>\n — Alex Kr\u00fcger (@krugermacro) January 30, 2019<\/a><\/p><\/blockquote>\nRelated Reading:\u00a0Issuance Of Crypto Assets Will Push Bitcoin Lower, Claims St. Louis FED<\/a><\/em><\/h6>\n
Where Does Bitcoin Fit In All This?<\/strong><\/h2>\n
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